In Germany, higher education is traditionally a public service and therefore publicly funded and provided by public higher education institutions. Although major reforms started more than a decade ago, this basic feature has not changed. The article tries to explore why the German higher education system remains public. It starts from an economic viewpoint. In economic theory it is argued that public funding and provision of higher education is not as efficient as the private funding and provision. Taking this into consideration, a public higher education system has to be founded on other than economic reasons. Two approaches from interdisciplinary higher education research can help to understand where the tradition of the public provision and funding in the German system is rooted and why it has proofed stable so far.